Arthur J. Gallagher & Co. AJG is set to report fourth-quarter 2024 earnings on Jan. 30. The company delivered an earnings beat in three of the last four reported quarters and missed estimates in one.

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Factors to Consider

Better performances in both segments are likely to aid AJG’s fourth-quarter results. The quarterly performance is likely to have benefited from new business, solid retention and higher renewal premiums across its business lines.

The Zacks Consensus Estimate for fees is pegged at $910 million, indicating an increase of 13.5% from the prior-year period’s reported number. The consensus mark for commissions is pegged at $1.5 billion, implying 14.2% growth from the prior-year period’s reported number.

New business wins, outstanding retention and increases in customer business activity are likely to have favored the Risk management segment.

Increased commissions and fees, higher supplemental revenues and improved contingent revenues and investment income, as well as strategic mergers and acquisitions, are likely to have driven the top line in the to-be-reported quarter. The Zacks Consensus Estimate for fourth-quarter revenues is pinned at $2.7 billion, indicating an increase of 9.7% from the year-ago reported figure.

Management expects organic growth of about 8% in the Brokerage segment with margin expansion between 90 and 100 basis points. In the Risk Management segment, the company expects organic growth of about 7% in the fourth quarter.

Total expenses are likely to have increased mainly because of higher compensation, reimbursements, interest, amortization and changes in estimated acquisition earnout payables. 

The Zacks Consensus Estimate for fourth-quarter 2024 earnings per share is pegged at $2.03, suggesting an increase of 9.7% from the year-ago reported figure. 

What the Zacks Model Unveils

Our proven model predicts an earnings beat for AJG this time around. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). 

Earnings ESP: AJG has an Earnings ESP of +0.03%. This is because the Most Accurate Estimate of $2.04 is pegged higher than the Zacks Consensus Estimate of $2.03. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Arthur J. Gallagher & Co. Price and EPS Surprise

Arthur J. Gallagher & Co. price-eps-surprise | Arthur J. Gallagher & Co. Quote

Zacks Rank: AJG currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Here are three insurance stocks you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat:

Aon AON has an Earnings ESP of +2.75% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for fourth-quarter 2024 earnings is pegged at $4.24, indicating a year-over-year increase of 9%

AON’s earnings beat estimates in one of the last four reported quarters while missing in the other three.

RenaissanceRe RNR has an Earnings ESP of +0.88% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for fourth-quarter 2024 earnings is pegged at $7.39, indicating a year-over-year decrease of 37.2%.

RNR’s earnings beat estimates in each of the last four reported quarters.

W.R. Berkley Corporation WRB has an Earnings ESP of +1.37% and currently carries a Zacks Rank of 3. The Zacks Consensus Estimate for fourth-quarter 2024 earnings is pegged at 95 cents, implying a decrease of 2.1% from the year-ago reported figure.

WRB’s earnings beat estimates in each of the last four reported quarters.

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